PROS WITH HEART

Twenty-seven years after we first began bestowing Outstanding Broker Awards on a select group of reps, Registered Rep. has finally decided it's time for a change.

May 01, 2007

Twenty-seven years after we first began bestowing Outstanding Broker Awards on a select group of reps, Registered Rep. has finally decided it's time for a change. This year, for the first time, we are calling our awards the Outstanding Advisor Awards. You might think it's about time.

The advisors chosen for the awards over the last several years hardly fit the now-outmoded term broker. It's a word that is rarely used to describe what most reps do. And our award recipients, seven of whom are dually registered, offer top-quality investment advice — some offer much more, including financial plans, retirement, tax and estate-planning and risk management — to primarily wealthy clients. Indeed, our winners often do some (or, in some cases, mostly) fee-based business and conduct themselves as objective financial-advice givers.

In some ways, our timing couldn't be better, with the battle in the industry over what kinds of accounts qualify as “advisory” accounts versus “brokerage” accounts under the Investment Advisers Act of 1940 having recently come to a head. It's possible that the FPA's win in court against the SEC over the “Merrill Lynch rule” will result in an even greater shift away from “brokerage” and in favor of “advisory,” as many of the remaining fee-based brokerage accounts could end up being converted to advisory accounts. (For more on this, see our cover story on page 30.)

But Merrill Lynch rule aside, all of our advisor winners are just that — advisors. And they have all been highly successful at providing advice to their clients. Just take a look at the kinds of businesses they have built and the volume of assets they manage. Not only have these individuals risen to the top at their respective firms (they must be among the best businesswise to qualify for the award), they have served as guides to other financial advisors and as leaders in their communities. What makes them really stand out is that they spend considerable time, energy or financial resources on charitable causes. And not just for networking or client acquisition purposes. Our winners tend to become engaged in causes that have special meaning for them.

As always, the selection process was very tough. There were more qualified candidates nominated than could possibly be included here. But read on. These profiles are meant to inspire.

In November 2005, Carl Bailey took a trip to Nicaragua, where he spent three weeks living in the barrios of its capital, Managua, volunteering to help the poor and trying to learn something about the culture. He wanted to understand why so many Central Americans had risked their lives to immigrate to his hometown of Danbury, Conn., where they barely scraped by.

Bailey quickly discovered that Managua's poor live in conditions that are far worse than he had imagined. He found city slums riddled with drugs, crime and violence, particularly against women. “Almost half of Nicaragua doesn't have the opportunity for employment,” Bailey says. “I feel like I've had everything handed to me, whereas these people were given nothing.”

Bailey was moved to help however he could. Through Connecticut Quest for Peace, an ecumenical faith-based organization dedicated to helping the poor and marginalized of Nicaragua, Bailey has helped to launch micro-lending programs in the barrios he visited, and he has paid for a psychiatrist to help women and children who were sexually abused for a period of one year.

He also donated 30 new computers to a local grammar school, as well as dozens of sewing machines so women could make clothing. In addition, he provided the funds to create a soccer field and build a library and a job training facility. All told, he personally donated and raised $150,000 for these projects.

Bailey shows this kind of dedication to most everything he does, and it shows in his financial advisory practice. As president of Bailey and Beatty Financial Services, an independent broker/dealer affiliated with Commonwealth Financial Network, Bailey has consistently ranked in the top 1 percent of FAs since affiliating with the firm in 2002. His practice serves more than 500 clients from all walks of life — laborers, corporate executives, teachers and small-business owners — with assets ranging from $10,000 to $22.5 million.

What's the secret to his success? “He's ethical, knowledgeable and very responsive,” his client Rich Paganello says. “The main thing is I don't have to worry about my retirement.” Since coming aboard as a client, Paganello says he has recommended Bailey's services to five other people who later became clients.

Paramount in his life is his awareness of how fortunate he is to live in this country and work in a lucrative field. “Instead of looking at it like ‘the more I make, the more I can have,’ I view it as ‘the more I have, the more I can give,’” he says. “And that means creating a better life for others.” — KB

THE WORKAHOLIC: LARRY WAYNE CARROLL

Firm: ING Financial Network

City: Charlotte, N.C.

Age: 55

Years as a Rep: 26

Years with Current Firm: 12

Production: $3.6 million

AUM: $500 million

Product Mix: stocks, 40%; bonds, 3%; funds, 55%; insurance, 2%.

Specialty: Retirement planning and fee-based asset management

Designations: CFP, CMFC

Licenses: Series 7, 24, 63, 66, Insurance

Larry Wayne Carroll is a self-professed workaholic. These days, he works a 50- to 60-hour week, and that's after scaling back a bit. Not so long ago, it was more like 70 to 75 hours, he says. Oh, and his hobby? Running a bank. Last year he started Park Sterling Bank, where he also serves as chairman of the board.

It is partly his dedication to work that made Carroll decide that the best way he could benefit others and give back to the community was to work hard at the office and contribute his money, rather than his time, to charity. He has given generously. He started out contributing $250,000 a year to a number of causes, but in the past three years he has doubled that contribution to $500,000.

Carroll gives primarily to the local chapters of the American Red Cross and YWCA, where his wife, who retired from Merrill Lynch five years ago, is a board member. He has also given big gifts to Habitat for Humanity and the York County Cultural Museum, among other groups. “I've been blessed and feel some obligation to return some of that to the community,” he says. “What I have accumulated has been because this community has been very, very good to me.”

Carroll started his own practice, Carroll Financial Associates, in 1980 without any financial-planning or investment management experience and without a single client. The first three years were rough, he says. “I let my wife support me.” But then it clicked. “I did a lot of speaking and teaching to meet people and figured out I could take advantage of my more technical background in terms of my positioning in the industry.” That technical background was an accounting degree and two years as a practicing accountant at Pete Marwick (now KPMG).

Today, Carroll is the only producer on a four-person team that takes a financial-planning and wealth-management approach to serving clients — all of whom are either in retirement or approaching retirement. “If a 20-something or 30-something two-income couple walked in the door, we would refer them to someone else in the office,” he says.

These days, he's doing pretty well for himself. Carroll has been the first or the second biggest producer at ING's Financial Network for the past seven years, and he has been recognized as a top advisor in several other publications over the years. What's his secret? Good, reliable service, great communication and excellent performance, Carroll says. — KF

John Christopher Cooke is an advisor with a bit of the prairie in him, and it's something that shows in everything from his business to his charitable activities. Apart from putting his all into being a father of three, he spends much of his time outside the office working on the board of Conner Prairie, a living history museum he says is the Williamsburg, Va., of the Midwest, and at other charitable organizations, like a local family advocacy center, the Penrod Society — which raises money for children in the arts — and a group called Inquisitive Kids that publishes educational newspapers for third and fourth graders.

Cooke believes in honesty, hard work and fairness — good solid Midwest values — and it is to these things that he attributes his success as a financial advisor. “You have to be honest, forthright, sincere and caring in this business. And there's no secret to it. It's just the golden rule,” he says. “If you can do that with high-quality technical advice and high-touch services,” then you're on your way.

Cooke's branch manager, Gerald Berg, backs Cooke up on this point, saying, “Chris leads his team, our branch and many in our firm with his example of hard work, intelligence and impeccable ethics.”

Cooke started out as a staff researcher at Ernst & Whinney, now Ernst & Young, straight out of college. Then he went to Indiana University Law School at Indianapolis. But, he soon decided he didn't want to be an accountant or a lawyer and, so, in the summer of 1991, he put his expertise to work at his father's Prudential financial advisory practice. Today, he, and his father and his brother are senior partners in the Cooke Group at Wachovia, together with five others.

Each client is assigned a primary point of contact, but Cooke says all clients have access to all eight partners, because each has his or her own area of expertise. Cooke's average client has $2.5 million invested.

Cooke's work with Conner Prairie is his chief charitable activity. The outdoor living history museum has personal significance for Cooke: He took his wife there on their first date, and his wife went into labor with their first child there. He's very proud of the organization — which today includes the original pioneer settlement set in 1836, as well as a Native American settlement from 1816 and a Victorian farm set in 1886. Attendance is up — unlike attendance at other living history museums around the country — plus, the endowment and fundraising are up, too, he says.

“Money is important, but it's not the be-all end-all,” says Cooke. “Family should be first, money second, to having good quality of life. We surprise some clients when we tell them you need to do something to spend your money, not just invest your money.” — KF

Stephen Drake believes that nothing should be taken for granted. For children with multiple handicaps, the mundane rituals of every day are a challenge, and for the past 10 years, Drake has been trying to do something about that.

Drake is a board member, donor and volunteer for Be an Angel, a charitable organization in the Houston area that provides support for children who are deaf and crippled. These special needs children are from low-income families that do not have adequate health insurance coverage.

“It's overwhelming how many kids fall through the cracks,” Drake says. Drake nearly lost his own son to a head injury six years ago, but his son recovered almost fully. His resolve in helping others only grew stronger. “When it comes to leadership, he does it in the truest form. He leads by example,” says Marti Boone, executive director of Be an Angel.

Drake has played an integral role in fundraisers that have enabled Be an Angel to build a $700,000 barrier-free playground, purchase hearing aids and adaptive communication devices for the hearing impaired and wheelchairs for the kids who cannot walk. Through his hard work and financial support, Be an Angel raised $1 million last year alone.

A volunteer for the last 10 years and a former chairman of the organization, Drake has never missed a fundraiser and even holds monthly board meetings in his own RBC office. It is this hands-on approach that has made him successful both in philanthropy and in the business world.

Drake, who is the top producer in a $20 million branch, specializes in retirement accounts for baby boomers, and uses predominantly managed accounts with a significant portion in fixed income. He is a perennial top consultant at the firm and has been recognized for the last seven years as a member of the Chairman's Council, which honors the top 5 percent of the firm's producers. In 2006, he was ranked No. 1 in the firm for fund-advisory services. — KB

Grant Lee was steered into the financial advisory business early in his career by a high-powered mentor. Through Franklin Templeton's management-training program, his first job out of college, Lee became close friends with Henry Jamieson, the chairman of the board at Franklin. Jamieson served a number of advisory clients himself, and he thought Lee, with his strong work ethic and outgoing personality, would make a great fit for the advisory business. Jamieson was right. “I took to it immediately,” says Lee.

Though he started out as a classic cold-calling broker, Lee soon took over a book of international clients from an advisor who left the firm. He developed a wealth-management team around these clients, and the business expanded rapidly. Then in 1994, when Lee had his first child, he and his wife decided he shouldn't travel so much anymore, so he shifted his business to domestic wealth management and began pursuing the wealthy tech set in Silicon Valley. “We got lucky,” he says. “We were in the right place at the right time.”

Today, he and one other partner, as well as two non-equity junior partners, provide wealth management primarily to executives who have made their wealth from concentrated positions in company stock. His average client has between $10 million and $25 million to invest — what he calls the “sweet spot” in Silicon Valley.

The experience of having a powerful and influential mentor left a lasting impression on Lee, who has since dedicated himself to mentoring others in the financial advisory business — and to throwing himself into an intensely committed father-son relationship with a troubled kid through the San Francisco Big Brothers/Big Sisters program, on whose board he has also served as a member and president. Lee first met Nelson Tran (name used with permission) in 1989 when Tran was nine years old. This June, Tran will graduate from college. He already has a lucrative job as a wholesaler, making over $100,000 a year, and is thinking of starting his own business.

Over the years, Tran introduced Lee and his wife Kim to, among other things, the city school system, attempted burglary and juvenile hall, ROTC, parent/child orientation at UC-Santa Barbara, bartending and academic probation. “Long story short, I've been lucky to serve as a mentor/role model for him for the past 18 years. He's blood now,” says Lee. “Kim and I agree that it was one of the best things we ever did together.” — KF

THE CURE SEEKER: DAVID MALLACH:

Firm: Merrill Lynch

City: Elkins Park, Pa.

Age: 58

Years as a Rep: 34

Years with Current Firm: 34

Production: $3.7 million

AUM: $350 million

Product Mix: stocks, 100%

Specialty: Income growth and asset growth

Designations: N/A

Licenses: Series 7, 63, 65 and Insurance

In October, David Mallach will fly to Botswana to see a house he purchased for the very first time. But this is no ordinary house. The Mallach House, as it is called, serves as a dormitory for University of Pennsylvania doctors, nurses and medical students who are conducting HIV research and administering treatment. Botswana has one of the highest rates of HIV in the world, with 38 percent of adults between the ages of 15 and 49 infected by the disease.

The Penn program began as a joint effort between the government of Botswana, the Bill and Melinda Gates Foundation and the Merck Foundation. Penn physicians were invited to help develop and implement HIV treatment and prevention programs and to help train locals in the management of HIV-infected patients. But the medical professionals who traveled there had great difficulty adjusting to the conditions — particularly the intense heat.

With Mallach's help, Penn was able to provide comfortable living for them so that they could focus on their work. Penn was planning on purchasing the house, but it would have involved months of “red tape,” says Stephen Gluckman, professor of medicine and chief of Infectious Diseases Clinical Services at the university. (Dr. Gluckman is also Mallach's primary care physician.) Mallach decided to purchase it himself. “This saved a lot of time and hassle. Since that time he has both maintained his interest and given us substantial financial support,” says Gluckman.

To date, Mallach has donated more than $325,000 to the Penn program in Botswana. One way Mallach helps is by donating the proceeds from his three books: Moneyworks, Investment Secrets and Dancing with the Analysts. A fourth, Walking with the Analysts, is due out this summer.

Mallach has worked for Merrill for his entire career and his book of business is invested in stocks. But he's not the stock jockey of yore. He characterizes his investment strategy as “a clever way to organize all the complex information on Wall Street so that it's actionable.” Essentially, he seeks capital appreciation through a forecasting technique based on analysts' earnings projections: When an analyst has raised his earnings estimate at least twice in a six-month period on particular company, Mallach buys the stock.

Mallach has helped hundreds of other FAs at Merrill implement his strategy. “In an industry dominated by competitive type-A personalities, individuals that at times are self-absorbed, David has selflessly given his time, thoughts and ideas for others to benefit,” writes Scott Blanche, resident director at Merrill's Elkins Park, Pa. branch, in a nomination letter. — KB

Lewis Metzger has a knack for managing money. He bought his first stock when he was 12 years old — it was RCA, the only US manufacturer of color televisions at the time. “I made money, and I said, ‘Hey, I like this,’” Metzger says. “Of course, the business has changed tremendously since then. But there are certain people who are just great artists and others who can't draw a straight line. I'm just good at handling money,” he says.

Financial-services industry professionals seem to agree: His client list includes a number of managing diirectors and current and retired executives from Wall Street firms. In fact, he turned one client on to a career in wealth management, and after a decade and a half in the profession, she has put herself back in his able hands. “In the early 1980's as a homemaker, I was a stock-market enthusiast,” says Ginger Kaplan. “Lewis was my broker. I loved the stock market so much that, with his encouragement and counseling, I obtained my Series 7 license and joined Shearson Lehman. Years later, I left Shearson to join Smith Barney and became an associate in the same office with Lewis. After 15 years as a successful financial consultant, I formally retired. Again, I find myself a client of Lewis Metzger as he oversees my portfolio, our family trusts and the portfolios of my children and grandchildren.” That is an endorsement that's hard to beat.

Outside of the office, Metzger dedicates a lot of time to family and serves on the boards of educational institutions, like the Spring Branch Education Foundation and the President's Cabinet at the University of Alabama. He is also a lifetime member of two conservation groups — the Houston Safari Club and the Coastal Conservation Association.

Both conservation and education are causes that are close to his heart. He has been hunting and fishing since he was a boy, and separately, he has spent a lot of time and energy trying to help his son conquer learning disabilities. Education is the “foundation that's going to make you successful in life,” says Metzger. “If I can help some kids have a better life it makes me feel good.” — KF

THE FAMILY MAN: CARLO PANACCIONE

Firm: LPL Financial Services

City: Redwood Shores, Calif.

Age: 46

Years as a Rep: 21

Years with Current Firm: 9

Production: $1.5 million

AUM: $175 million

Product Mix: managed accounts, 97 %; insurance, 3 %

Specialty: Estate planning, wealth preservation

Designations: CFP

Licenses: Series 7, 24, 63, 66, Insurance

Carlo Panaccione is a family man. But his definition of the word extends beyond his own wife and children — he says both his clients and staff are family. Even as one of LPL Financial Service's top advisors with $175 million in assets under management and over $1 million in production, he often makes personal visits to clients' homes when necessary.

And perhaps in no other instance was his dedication to his adopted family members more evident than when his partner of seven years was diagnosed with breast cancer in 2001 while pregnant with her second child. When Linda McKenzie passed away 18 months after giving birth, Panaccione was overwhelmed, but he stepped up to make sure her clients would be taken care of and her practice would remain intact.

After her death, Panaccione began training McKenzie's husband Kurt Jorgensen, a business consultant, to take over his late wife's practice. Jorgensen retained ownership of his wife's practice while Panaccione took on the majority of the client responsibilities. The plan allowed for Jorgensen to become familiar with the business and eventually take over without the risk of losing clients. “Carlo and his staff were willing to step in and help run her practice while I got the qualifications to take over. With his help, we were able to make the transition as seamless as possible and save the practice,” Jorgensen says.

With the responsibilities of two practices (his own and McKenzie's) in his care, Panaccione has had less time to remain active in his community. But once the transition is complete, he plans to focus his charitable efforts on a program he's dubbed the Just in Case Foundation. The idea, he says, is to preserve the legacies of terminally ill and Alzheimer's victims through documentary-style videos left behind for their families. The videos will be developed through partnerships with local media and film students.

Pannacione's commitment to family has had a huge impact on how he runs his wealth-management firm, The Navigation Group. Panaccione, who works primarily with high-net-worth families, specializes in family wealth preservation and estate planning. He recently launched the Legacy Planning Process, which entails bringing different generations of his clients' families together to develop a “Family Financial Philosophy.” “We want to make sure that the people inheriting the money from the previous generation are not just going to blow it,” he says. Simply put: “We want heirs to turn out more like Caroline Kennedy than Paris Hilton.” — HT

THE BEHIND THE SCENES MAN: ALFRED JOHN SALVINO

Firm: William Blair & Co.

City: Chicago

Age: 68

Years as Rep: 43

Years with Current Firm: 19

Production: $3.8 million

AUM: $375 million

Product Mix: stocks, 55%; bonds, 30%; funds, 15 %

Specialty: Discretionary money management

Designations: N/A

Licenses: Series 00, 1, 24, 63, 65

Al Salvino has been a financial advisor for 44 years and has amassed a sizable practice that now includes his sons Tom and John. “I'm lucky,” Salvino says, “I love my job.” Ask him how he found his calling, however, and he can't quite put his finger on it. He was a self-described “liberal arts guy” at Notre Dame; after he graduated, he went into the service as a medic (but, thankfully, his unit was never called to Vietnam). His father, who emigrated from Italy with Al's mother, invested and was a businessman. Still, Salvino says that he more or less just fell into the investing business. “I'm still fascinated with [finance] even after 44 years,” he says.

The reason why: “I like helping people. I like giving them guidance. It feels good.” As for his practice, he helps people of all kinds, from medical groups to pizza parlor owners (though his neighborhood, Beverly, on Chicago's south side, is better known for its Irish bars) to tool and dye factory owners. Salvino says his firm will help anyone. “If someone is a reasonable person with working capital and needs help, we'll help.”

Salvino and his wife, Carol, are active in Beverly, putting their shoulder to the wheel, as he says. “We just want to be part of something,” he says. The Salvino's are active in sponsoring the Beverly Arts Center, the Beverly Area Planning Association, Catholic Charities and the Marist High School in Chicago. He's even a financial supporter of Beverly Hills Cycling Classic, an international bike race that draws 8,000 spectators into the Beverly neighborhood. Willie Winters, former director of the Beverly Area Planning Association, said the event would not have happened without Al's financial support and promotion.

Marty Wirtz, the major gifts officer of the Marist High School, where Salvino sent his three boys, says, “Without getting into the particulars, Al's focus has been on the endowment fund to provide tuition for boys who otherwise wouldn't be able to afford it. The Salvinos are very giving, very philanthropic. They go over and beyond the call of duty.”

The work isn't necessarily glamorous either. “They do lots of behind the scenes stuff that goes unnoticed except by us,” Wirtz says. “He and his wife — it's really a package deal — are really a credit to the community.”

Salvino sums up his credo this way: “I think making a better world is maybe the accumulation of small things, treat people how you want to be treated,” he says. “That's my definition.” — David Geracioti

In 2005, when the Colorado Society of Certified Public Accountants fell short of its $1 million endowment goal, Mark Smith chipped in — big time. He personally funded the remaining $80,000. The endowment was established to help fund educational scholarships for local accountants — a cause that Smith feels hits close to home.

The donation to the Colorado Society of CPAs — which he continues to support — was not Smith's first experience funding educational causes. Six years ago, he set up a scholarship program at his alma mater, the University of Iowa, for business students from low-income, single-parent families.

Smith and his two siblings were raised by their single mother in Fort Dodge, Iowa. His mother worked two jobs to support a family of four, and Smith relied on scholarships for his own education. “ I would not have been able to go to college if it weren't for scholarships,” he says.

Smith graduated with an accounting degree from Iowa and had plans to run his own CPA firm in Colorado after a stint with Deloitte, Haskins & Sells. But while earning a certified financial planner designation, Smith became “enamored” with personal financial planning. So, he joined Raymond James in 1983 and also registered with the SEC to start his own RIA. “I wanted to make a bigger difference in People's lives by helping them reach their dreams,” he says.

Today, he has a staff of 13, including two junior partners, and he offers fee-based asset-management and comprehensive financial planning, to clients. Smith has been ranked Raymond James' top advisor for the last three consecutive years, and has been one of its top three for the past 12. His clients like him. “I had multiple clients I referred to Mark and they are all still investing with him,” says Phil Debus, a client and a CPA. “I was their tax advisor and they'd say, ‘Thank you so much for referring us to him.’”

As one of the firm's top producers, Smith has partnered with Raymond James to lead financial workshops for the firm's advisors. It's the profits from these workshops that have funded Smith's latest charitable efforts.

In the fall of 2006, Smith endowed two fully funded scholarships at Iowa Central Community College for students from low-income homes. According to the school's president, 38 percent of the students at Iowa Central come from families who live below the poverty level. So far, proceeds from the financial-planning workshops have totaled over $250,000.

An end to the workshops won't mean a end to his scholarship funding, though.“I'll pay for them myself,” he says. And you know he's good for it. — HT